The Coming Doom Loop
NEW YORK – In January 2022, when yields on US ten-year Treasury bonds were still roughly 1% and those on German Bunds were -0.5%, I warned that inflation would be bad for both stocks and bonds. Higher inflation would lead to higher bond yields, which in turn would hurt stocks as the discount factor for dividends rose. But, at the […]
No Respite from the Slow-Motion US-China Collision
NEW YORK – I recently attended the China Development Forum (CDF) in Beijing, an annual gathering of senior foreign business leaders, academics, former policymakers, and top Chinese officials. This year’s conference was the first to be held in person since 2019, and it offered Western observers the opportunity to meet China’s new senior leadership, including new Premier Li […]
America and China Are on a Collision Course
NEW YORK – Following the May G7 summit in Hiroshima, US President Joe Biden claimed that he expects a “thaw” in relations with China. Yet despite some recent official bilateral meetings – with US Secretary of the Treasury Janet Yellen expressing hopes for a visit to China soon – relations remain icy. In fact, far from thawing, the new […]
A Mild Global Contraction Is Coming
EW YORK – There are currently four scenarios for the global economic outlook. Three of these entail potentially serious risks with far-reaching implications for markets. The most positive is a “soft landing,” where central banks in the advanced economies manage to bring inflation back down to their 2% targets without triggering a recession. There is […]
Israel’s Slippery Slope
TEL AVIV – My current visit to Israel has coincided with a period of unprecedented political turmoil. A radical right-wing government’s package of legislation to disempower the judiciary has started to be adopted, leading many to worry that this great country’s robust liberal democracy is being eroded. Since Israel lacks a formal written constitution, it […]
Preventing a US-China War
NEW YORK – The United States and China remain on a collision course. The new cold war between them may eventually turn hot over the issue of Taiwan. The “Thucydides Trap” – in which a rising power seems destined to clash with an incumbent hegemon – looms ominously. But a serious escalation of Sino-American tensions, let alone […]
What Climate Finance Needs
NEW YORK – As we move from UN Climate Week to COP28 in Dubai later this year, we must stop the “greenwishing” and “greenwashing” and start thinking about the instruments that will enable the private sector and private investors to channel more capital toward climate resilience and sustainable development. While the public sector has an […]
The Economic Consequences of the Gaza War
NEW YORK – Hamas’s barbaric massacre of at least 1,400 Israelis on October 7, and Israel’s subsequent military campaign in Gaza to eradicate the group, has introduced four geopolitical scenarios bearing on the global economy and markets. As is often the case with such shocks, optimism may prove misguided. In the first scenario, the war […]
Our Megathreatened Age
NEW YORK – Since the publication of Megathreats in October 2022, the themes I emphasized have gone mainstream. Everyone now acknowledges that economic, monetary, and financial threats are rising and interacting in dangerous ways with various other social, political, geopolitical, environmental, health, and technological developments. Hence, in December 2022, the Financial Times chose “polycrisis” as one of its buzzwords of […]
Where Will the Global Economy Land in 2024?
NEW YORK – Around this time a year ago, about 85% of economists and market analysts – including me – expected that the US and global economy would suffer a recession. Falling but still-sticky inflation suggested that monetary policy would grow tighter before rapidly easing once the recession hit; stock markets would fall, and bond yields would […]